M/S Agrawal Oil Mill Thr. vs. The State Of Madhya Pradesh

Held

The Court declined to admit the petitions, holding that the petitioner was afforded due and sufficient opportunity to produce relevant documents. The authority's apprehension that supplying copies of seized documents could lead to interpolations and adversely affect the investigation was considered reasonable. The Court found that the discretion exercised by the competent authority under Section 67(5) of the CGST Act in withholding the supply of copies/extracts was judicious and based on cogent reasons. Since no jurisdictional error was found in the impugned orders, and an alternative statutory remedy of appeal was available but unavailed, the Court found no reason to interfere. The petitions were dismissed in limine.

Facts

The petitioner, M/s Agrawal Oil Mill, filed three writ petitions challenging orders passed by the Assistant Commissioner, State Tax, Shivpuri, imposing tax liability, interest, and penalty for assessment years 2017-18, 2018-19, and 2019-20. The petitioner argued that the orders were passed in violation of natural justice due to the denial of copies of seized documents, which they contended was a violation of Section 67(5) of the CGST Act. The search and seizure occurred on May 29, 2019. Show-cause notices were issued, and hearings were held. The petitioner requested copies of seized documents, the proposal order, and the scrutiny report. The authority denied these requests, citing the petitioner's failure to produce crucial documents like cashbooks and ledgers, and forming an opinion that supplying copies would allow for interpolations, prejudicially affecting the investigation. The petitioner ultimately failed to produce all demanded documents, leading to ex-parte orders.

Key Issues

1. Whether the denial of supply of copies/extracts of seized documents to the petitioner by the competent authority, in the facts and circumstances of the case, constitutes a violation of the principles of natural justice and Section 67(5) of the CGST Act, 2017? The petitioner contended that Section 67(5) of the CGST Act mandates the supply of copies/extracts of seized documents unless the competent authority forms an opinion that such supply would prejudicially affect the investigation. They argued that once documents are seized, supplying copies cannot lead to manipulation. They relied on decisions from the Bombay High Court (High Ground Enterprises Ltd. Vs. Union of India & another) and Kerala High Court (M/s Mozart Global Furniture Vs. The State Tax Officer and another), and Supreme Court decisions in M/s Filterco vs. Commissioner of Sales Tax Madhya Pradesh and M.G.Abrol, Addl. Collector of Customs Bombay Vs. M/s. Shantilal Chhotelal and Co. The respondents/State argued that the denial was justified as the petitioner failed to produce essential documents, and supplying copies of seized documents could enable interpolations, thereby prejudicially affecting the investigation. The authority exercised its discretion under Section 67 of the CGST Act.